On July 14, a major Chinese commercial bank announced the closure of its main credit card headquarters, transferring all related operations to a newly established credit card division within the same institution.
This move comes amid a ongoing reduction in credit card activities, which saw the closure of seven regional credit card centers last January. The total credit card balance decreased to 70.4 billion yuan (approximately 10.4 billion USD) by the end of 2024, down from 86 billion yuan at the close of 2023. The year-over-year decline has accelerated from 15% to 18%, although the specific end-of-year figure for 2023 was not publicly disclosed.
nationwide, 66 regional credit card centers were shut down last year, with their associated operations either consolidated into local branches or discontinued entirely. According to estimates, the country’s total credit card debt dropped by over 1 trillion yuan (roughly 147.4 billion USD) from a peak of 8.7 trillion yuan (about 1.28 trillion USD) at the end of the previous year.
For over two decades, the credit card business within commercial banks was managed through a centralized system featuring independent accounting, assessment, and operations, which significantly contributed to rapid growth during its expansion phase, explained Zeng Gang, deputy director of a national financial development research institution.
However, as the market shifts towards a focus on existing customers—what’s known as stock competition—these systemic limitations have become more apparent. Disconnected from other business units, the credit card division experiences low cross-selling rates and incurs redundant personnel costs, Zeng noted. Additionally, the short-term focus on profits has increased long-term risks, creating inherent conflicts with broader corporate strategies.
The dissolution of this monolithic system is expected to influence how banks organize and transform their customer management approaches. Moving forward, credit cards will once again serve as key entry points for banks to engage clients and strengthen relationships. Instead of merely generating profit from individual products, banks will aim to enhance overall customer value, Zeng added.
Achieving this requires a comprehensive overhaul of operational processes—from customer acquisition and product development to service delivery. Breaking down data and process silos across credit cards, savings, wealth management, and loans is crucial for truly adopting a customer-centric, integrated operation model, according to Zeng.
As of the end of last year, China had 696 million valid credit cards, a decline from 767 million at the end of 2023 and 727 million at the end of 2024, marking 13 consecutive quarters of falling issuance, according to data from the country’s central bank.